Kuwaiti Vehicles Market in June increased again by 14.1% with 55.710 units sold. Toyota signed a stunning performance (+63.9%), holding over 30% of share. The follower, Nissan, declined 16.8% while Chevrolet conquered the podium, improving in double-digits.
Kuwait’s economy gained steam in Q1 according to recent data, with growth clocking 2.6% year-on-year. Although the oil sector expanded slowly, constrained by OPEC+ production cuts, the non-oil sector picked up amid strong showings from the manufacturing, and hotels and restaurant subsectors.
The economic picture appeared broadly unchanged in Q2; oil output was subdued, while the non-oil sector should have supported the economy. Private-sector credit growth was brisk in April and May, amid higher lending to firms and households.
Kuwait vehicles market hit the all-time record in the 2014 with 162.719 sales ending a long positive path. Then, the sudden economic crisis generated by the fall of oil price hit the sector with sales declined for three consecutive years. In the 2017, light vehicles sales have been 106.913, down 7.8% from the previous year.
In the 2018, according to data reported by the Kuwaiti Authority for Transportation, the market has finally changed mood breaking the falling trend and scoring a positive second half with allowed to the end year with 107.534 sales, up 0.9%.
However, in the 2019 the market started with a flat trend. In January sales were up just 1.8% with 9.501 units sold, while keeping a negative score in the following months, with 9.159 sales (-2.8%) in February and with 10.626 (-4.1%) in March.
In April the market suddenly surged to 20.6% with 8.642 units sold, and the positive trend was held in May registering 9.037 units (+17.6%). In June, sales surged 14.1% with 8.745 units, leading year-to-date figures at 55.710, up 6.4%.
Brand-wise, the market leader in June was Toyota with 17.005 units sold (+8.7%), holding the crown with 30.5% of market share.
In second place Nissan with 5.499 (+2.1%) followed by Chevrolet with 3.878 (-6.6%), Kia with 3.526 (-3.2%) and Mitsubishi with 3.499 (-28.4%).
Looking ahead, the introduction of VAT in the country, have been postponed and this would allow the market to run in positive territory across the 2019, with our forecast for a market up between 7 and 10 percent.
Indeed, back in June 2016, all six Gulf Cooperation Council (GCC) member states signed the Common VAT Agreement. It was agreed that each GCC Member State would introduce a VAT system at a rate of 5%. In March 2018 the Kuwait National Assembly pushed back a vote on the implementation of a VAT system. While no definitive date has yet been set for the introduction of a new VAT system, Reuters reports from Kuwait have suggested the possibility of the VAT system introduction being postponed until 2021.
After an uncertain period, characterized by sales fluctuations, the Kuwaiti Market is seen to be growing during the 2019-2025 period of time. However, volatile oil prices, easing global economic momentum and geopolitical tensions pose downside risks to the outlook.
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